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“Earlier this month we concluded that if the proposed national allocation plans were allowed to stand, they would seriously undermine the credibility of the EU ETS and the mechanism of carbon trading as an effective way to tackle carbon emissions.
“Today’s announcement equates to a cut back of some 60 million tonnes of carbon dioxide, and shows willingness to tackle over-allocation across the Member States. If the same approach is applied to the outstanding allocation plans, cuts of this scale are in line with what is needed to fulfill Kyoto commitments and to drive a robust carbon market for Europe.
“As a result we believe today’s news is a welcome step in the right direction and signifies a systematic approach to applying a level playing field across Europe, which is important for the competitiveness of UK firms. In particular, we welcome the attention to the detail of the plans, including the elimination of future allocation guarantees. Assuming a similar robust approach is made on outstanding national allocation plans, which represent 60 per cent of remaining emissions, then today’s announcement bodes well for the credibility of the EU ETS in the next period.”
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